Increased biodiesel retentions: Minister Julián Domínguez's mistake and the decision-making process in Alberto Fernández's government

Yesterday, during the press conference of the Minister of Agriculture, Julián Domínguez, something happened that surprised when the announcements of the new measures for agriculture were made. These included raising withholdings for soy by-products and the creation of a fund to subsidize the price of flour that reaches bakeries, with the aim of curbing the rise in the price of bread.

In his presentation, the holder of the agricultural portfolio reported on the increase in oil and soybean meal retentions, which went from 31% to 33%. The extra proceeds from this concept will be used to finance the triguero fund.

But in the face of a consultation carried out by this medium on the increase in biodiesel retentions, as stated in the Decree published last Saturday in the Official Gazette, Domínguez first denied it, forcing his Undersecretary for Agricultural Markets, Javier Preciado Patiño, to correct it in front of the cameras: “Excuse me, minister, but the biodiesel rose to 30%,” he said, correcting the holder of the agricultural portfolio.

Although it transpired in the last few hours that the measures were decided by President Alberto Fernández and his economic team, of which Julián Domínguez is a part, the minister's error also suggests that other sectors of the Government coalition were involved in the design of the measures, such as the Ministry of Internal Trade. The area led by Roberto Feletti will be responsible for the administration and execution of the Temporary Stabilizing Fund for Argentine Wheat. At yesterday's press conference, Domínguez declined to respond to what extent this fund could influence the price of bread. He pointed out that the responsibility of his portfolio is the price of wheat and referred the question of the price of bread to competition from Internal Trade. An elegant way to stand out from the possible ineffectiveness of the measure.

In addition, at the beginning of the month, in another meeting with the press, Domínguez had said that the Government “will not take drastic measures to close exports and increase withholdings” in view of the impact of the war on international grain prices. Then the opposite happened, beyond the fact that the minister assured that they are temporary policies that - he argued - will not harm producers.

“We have to take care of the goose that lays golden eggs,” said Minister Julián Domínguez, referring to the productive sector. He defined it as the great generator of employment and foreign exchange, and which must be equipped with measures that generate predictability and confidence, in order to increase production levels. Meanwhile, the producer bases are currently mobilized and organizing assemblies, in rejection of the permanent change in the rules of the game and official policy towards the sector. Today there will be an assembly at the roundabout at the entrance to the town of Crespo, in the province of Entre Ríos, and tomorrow from 14:30 there will be a tractorazo in Ceibas, also in the territory of Entre Ríos.

More tailored rejections

So far, the rejection of various sectors of the countryside and agribusiness to the measures announced to contain the price of bread has been unanimous. The main argument is that they were applied at another time and did not solve the problems of the consumer, who continued to pay high prices for food, and resulted in a decline in production.

The four agro-bioindustrial value chains indicated in a statement their concern about the permanent change in the rules of the game, “unilaterally and unilaterally by the Government”. In addition, they warned that export taxes “conspire against the creation of genuine and federal employment. And to increase them is to move away from a lasting solution.”

Faced with this panorama, the members of Maizar, Acsoja, Argentrigo and Acsoja, said that “we are again stumbling upon the same stone. As Argentines we have an obligation to express our opinion and propose. We need clear rules, certainties and encouragement. More than 40% of our compatriots are below the poverty line. The need for genuine job creation is imperative, and along this path that will not happen.”

Finally, it was recalled that the Argentine State has extraordinary resources due to the increase in international prices. To which the leaders asked themselves: “Why not apply these extraordinary resources to the attention of people in need? There are tools (for example, Food card and elimination of VAT on specific products).”

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